The Memorial Day weekend has come and gone, and the Atlantic City land-based casinos are still closed. New Jersey Governor Phil Murphy has been cautious in his approach to reopening the casinos, and with good reason. Speaking about the casinos in a recent radio interview, he called them “a tough nut, but it’s one we’ve got to get right. It’s indoors. There’s no ventilation, it’s close proximity, and it’s largely sedentary.”
Murphy added, “It’s a huge game-changer in our economy and in the lives of literally tens of thousands of people out there. I would love nothing more than to say we’re ready to go. We’re just not there yet.”
There was not much backlash over the closures of the casinos over Memorial Day weekend even though it was a big economic hit for the local economy. The casinos being open for Independence Day weekend is the next big issue Murphy will have to deal with.
According to the Press of Atlantic City, Atlantic County Democratic Chairman Michael Suleiman asked Murphy to give guidelines in terms of the reopening of the casinos by the July 4 weekend. Independence Day has always been a big holiday in Atlantic City in terms of the revenue for the land-based casinos and it helps that this year July 4 falls on a Saturday.
The coronavirus has hit the Atlantic City economy very hard, as the city has had a decrease in unemployment to the tune of 32%. However, in Atlantic City, the death toll from the pandemic is much lower than most counties in New Jersey.
Suleiman referred to one or more of the Atlantic City casinos shutting down permanently if the summer season for gambling is lost.
Only four of the nine Atlantic City land-based casinos operated in the black in the first quarter of 2020 according to the New Jersey Division of Gaming Enforcement revenue report. A small portion of the economic issue comes from the casinos paying their employees for the final two weeks of March when those casinos were closed.
The casinos were opened for the first 11 weeks in the first quarter and only the Borgata had a profit of over $8 million. Even though the online New Jersey casino industry has thrived in the last couple of months the land-based casinos are still the breadwinner. In April of 2019, the casinos had a revenue stream of $218 million while that stream was $0 this April. In April the New Jersey online casino revenue was $83 million.
There were five land-based New Jersey that shut down from 2014-2016 and while that generated solid numbers for the remaining casinos the loss of around 10,000 jobs was a big hit to the local economy. The industry improved with the new Ocean Casino Resort and Hard Rock Casino Resort in 2018 where there were thousands of added jobs.
Not only is the reopening of the New Jersey casinos an economic issue but also a political one. Democratic New Jersey State Senate President Stephen Sweeney has been at odds with Murphy about various issues over the years. Sweeney had thoughts of running for governor back in 2017 but the financial backing that Murphy had scuppered those thoughts. He recently stated that the Atlantic City casinos “need to get back up and going again. They need to put people back to work.” He went onto say that the industry is “in trouble”.
It was estimated that the closure of the Atlantic City land-based casinos could cost the local economy $1.1 billion, according to The American Gaming Association. That two-month period has already passed.
Murphy was recently asked if the casinos, like other local businesses, would be open in a few weeks. He stated, “I don’t want to marry myself. I hope it’s that.”
Jim Allen, who is the Hard Rock International CEO, recently stated about the casino industry, “It’s going to be a very, very slow and gradual process of coming back. I do think that the long-term recovery could be close to a year.”